Forcing Foreclosure Mediation Better Than Voluntary?
Forcing Foreclosure Mediation Better Than Voluntary?
State foreclosure mediation programs that force the lender or home owner to participate tend to have a greater success rate than voluntary programs, according to research by the Federal Reserve Bank of Boston.
For example, mandatory foreclosure mediation programs in areas like Nevada had an 89 percent success rate among participants who were able to avoid foreclosure, and in Connecticut nearly 74 percent avoided foreclosure and more than half received a loan modification.
However, in voluntary foreclosure mediation programs, success hasn’t been as high. For example, in New Hampshire’s voluntary program, 14 settlements were reached in more than 100 mediation cases within an 18-month time-span. In Maine, which also has a voluntary program, nearly a quarter of the home owners failed to even show up. Of those who did, only 21 percent found an alternative to foreclosure and nearly 55 percent failed to reach an agreement at all.
Source: “Forced Foreclosure Mediation More Successful Than Voluntary: Boston Fed,” HousingWire (Sept. 29, 2011)
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